Hung made the statement at the Vietnam Leather,
Footwear and Handbag Association (Lefaso)’s conference on December 26, saying
that as a part of the rapidly-changing fashion industry, the leather and
footwear sector must focus on developing an appropriate supporting industry,
even though it would take significant time and resources.

Hung said the Ministry of Industry and Trade
would help domestic firms build a development strategy for the leather and
footwear supporting industry and raise incentive policies in credit, technology
and land for domestic producers, especially those of small and medium sizes.

He urged the association to enhance links
between domestic producers and the foreign-invested sector to help them
participate deeply in the global value chain.

The leather and footwear industry of Vietnam is
still heavily reliant on raw material imports.

The association’s statistics show that 60 percent
of raw materials for the industry must be bought from foreign countries, as
current production capacity of the supporting industry is modest.

According to Hung, free trade agreements like
the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
(CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) were widening doors for
Vietnam’s footwear exports.

However, the sector must focus on developing the
supporting industry together with using advanced technologies in production to
enhance competitiveness, cope with technical barriers to trade and boost
exports, Hung stressed.

Phan Thi Thanh Xuan, Lefaso’s secretary general,
said the gap between the foreign-invested sector and the domestic sector was
narrowing, citing the association’s statistics that the export share of the
domestic sector increased from 19.5 percent in 2016 to 21.2 percent in 2018.

The sector’s exports in January-November reached
17.68 billion USD, a rise of 8.4 percent over the same period last year, and
poised to reach the target for the full year of 19.5 billion USD, Xuan said.

Vietnam came only after China in footwear
exports, the association said, but added that average export prices of Vietnam
was 15 USD each pair, 1.6 times higher than China’s average prices.

Xuan said the association was optimistic about
the development of the sector in 2019 as the demand of major export markets,
like the US, EU, China, the Republic of Korea and Japan remained high. In
addition, the CPTPP and EVFTA and the US-China trade war would create
opportunities for the leather and footwear industry to boost exports.

The association forecast that footwear and
handbag exports would maintain a growth rate of 10 percent in 2018 to reach
revenue of 21.5 billion USD.

Vietnamese footwear products are now present in
more than 100 countries and territories, according to the association.-VNS/VNA